HOUSTON, TX, Aug. 16, 2023 (GLOBE NEWSWIRE) -- via NewMediaWire – SMG Industries Inc. (“SMG” or the “Company”) ( SMGI), a growth-oriented transportation services company specializing in the full-service logistics market, today reported financial results for its second quarter and year to date ended June 30, 2023.
Second Quarter 2023 Highlights (Financial Results Herein Exclude the Barnhart Acquisition Completed July 2023):
· Revenues increased approximately 21% for the three months ended June 30, 2023 compared to the three months ended June 30, 2022;
· Gross Profit improved to $2.9 million, or 14% of sales, for the three months ended June 30, 2023, compared to gross profit of $1.1 million, or 6% of sales, for the same period in 2022;
· Net loss improved to $1.8 million for the second quarter of 2023, compared to a net loss of $3.0 million for the same period in 2022;
· Adjusted EBITDA, a non-GAAP measure, was $1.6 million, or 8% of sales, for the second quarter of 2023 (see reconciliation table below), compared to $0.7 million, or 4% of sales, for the three months ended June 30, 2022;
· The Company completed the previously announced acquisition of the Barnhart Transportation family of companies on July 7, 2023 (the “Barnhart Acquisition”), creating a pro forma combined company with enhanced scale, better growth potential and an improved balance sheet.
Revenues for the three months ended June 30, 2023 increased to $21.8 million, an increase of approximately 21% from $18.0 million for the three months ended June 30, 2022. Revenues for the six months ended June 30, 2023 increased to $42.7 million, an increase of approximately 25% from $34.3 million for the six months ended June 30, 2022. The increases in sales in the second quarter of 2023 and six-month period ended June 30, 2023 were primarily driven by increased customer activity in the Company’s industrial transportation, heavy haul, and super heavy haul businesses.
Gross profit for the three months ended June 30, 2023, was $2.9 million, compared to $1.1 million for the same period of 2022. Our gross profit margin was 14% during the three months ended June 30, 2023, compared to 6% for the same period of 2022. The improvement in gross margin is due to higher revenues as described above and increased customer pricing as compared to the results for the three months ended June 30, 2022.
“The Company experienced gross margin improvement during the second quarter of 2023 resulting from higher revenues and enhanced pricing,” said Tim Barnhart, CFO of SMG. Mr. Barnhart continued, “While the Company is proud of this execution and results in the second quarter of 2023, the business combination of SMG and the Barnhart Transportation family of companies that closed on July 7, 2023 was a transformative event that significantly increased the scale of the combined business. The Company will publish its pro forma financial results in conjunction with the audited financial information of the Barnhart Transportation family of companies, which is currently anticipated during September 2023.”
Bryan Barnhart, CEO of SMG stated, “This is an exciting time at SMG Industries, as the upcoming pro forma combined results, including Barnhart Acquisition, will illustrate improvements to SMG’s scale, growth potential and balance sheet. This transaction allows the combined businesses to be a one stop shop, full service logistics provider for our customers, delivering seamless logistics solutions spanning the globe. We believe the Company has significant opportunity for ‘customer cross-fertilization,’ increased utilization of our combined equipment fleets and opportunities to leverage the experience within our management team and board of directors.”
| SMG INDUSTRIES, INC. | ||||||||||
| CONSOLIDATED BALANCE SHEETS | ||||||||||
| (Unaudited) | ||||||||||
| June 30, | December 31, | |||||||||
| 2023 | 2022 | |||||||||
| ASSETS | ||||||||||
| Current assets: | ||||||||||
| Cash and cash equivalents | $ | 209,843 | $ | 127,225 | ||||||
| Restricted cash | 1,105,818 | 1,105,818 | ||||||||
| Accounts receivable, net of allowance for doubtful accounts of $1,062,960 and $855,832 | ||||||||||
| as of June 30, 2023 and December 31, 2022, respectively | 13,219,155 | 12,185,792 | ||||||||
| Prepaid expenses and other current assets | 1,157,039 | 2,308,067 | ||||||||
| Total current assets | 15,691,855 | 15,726,902 | ||||||||
| Property and equipment, net of accumulated depreciation of $16,855,950 and $15,329,817 | ||||||||||
| as of June 30, 2023 and December 31, 2022, respectively | 4,287,064 | 5,414,830 | ||||||||
| Right of use assets - operating lease | 503,526 | 734,504 | ||||||||
| Other assets | 110,344 | 305,451 | ||||||||
| Total assets | $ | 20,592,789 | $ | 22,181,687 | ||||||
| LIABILITIES AND STOCKHOLDERS' DEFICIT | ||||||||||
| Current liabilities: | ||||||||||
| Accounts payable | $ | 3,892,775 | $ | 3,014,598 | ||||||
| Accounts payable - related party | 1,086,078 | 565,603 | ||||||||
| Accrued expenses and other liabilities | 3,085,444 | 2,850,547 | ||||||||
| Right of use liabilities - operating leases short term | 654,726 | 650,945 | ||||||||
| Deferred revenue | - | 128,000 | ||||||||
| Secured line of credit | 11,079,731 | 10,623,887 | ||||||||
| Current portion of unsecured notes payable | 2,723,657 | 2,465,445 | ||||||||
| Current portion of secured notes payable, net | 7,853,334 | 6,990,486 | ||||||||
| Current portion of convertible note, net | 8,906,741 | 7,327,288 | ||||||||
| Current liabilities of discontinued operations | 180,994 | 200,994 | ||||||||
| Total current liabilities | 39,463,480 | 34,817,793 | ||||||||
| Long term liabilities: | ||||||||||
| Convertible note payable, net | 513,401 | - | ||||||||
| Notes payable - secured, net of current portion | 11,469,241 | 13,307,309 | ||||||||
| Right of use liabilities - operating leases, net of current portion | 121,699 | 278,137 | ||||||||
| Long term liabilities of discontinued operations | 278,995 | 300,586 | ||||||||
| Total liabilities | 51,846,816 | 48,703,825 | ||||||||
| Commitments and contingencies | ||||||||||
| Stockholders' deficit | ||||||||||
| Preferred stock 1,000,000 shares authorized: | ||||||||||
| Series A preferred stock - $0.001 par value; 2,000 shares authorized; 0 shares issued | - | - | ||||||||
| and outstanding at June 30, 2023 and December 31, 2022, respectively | ||||||||||
| Series B convertible preferred stock - $0.001 par value; 6,000 shares authorized; 0 shares issued | ||||||||||
| and outstanding at March 31, 2023 and December 31, 2022, respectively | - | - | ||||||||
| Common stock - $0.001 par value; 500,000,000 shares authorized; 48,747,530 and 39,180,297 shares | ||||||||||
| issued and outstanding at June 30, 2023 and December 31, 2022, respectively | 48,748 | 39,181 | ||||||||
| Additional paid in capital | 15,142,034 | 18,081,457 | ||||||||
| Accumulated deficit | (46,444,809 | ) | (44,642,776 | ) | ||||||
| Total stockholders' deficit | (31,254,027 | ) | (26,522,138 | ) | ||||||
| Total liabilities and stockholders' deficit | $ | 20,592,789 | $ | 22,181,687 | ||||||
| The accompanying notes are an integral part of these unaudited consolidated financial statements | ||||||||||
| - | - | - | ||||||||
| SMG INDUSTRIES INC. | ||||||||||||||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||||||
| For the three and six months ended June 30, 2023 and 2022 | ||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||
| Three months ended | Six months ended | |||||||||||||||||||
| June 30, 2023 | June 30, 2022 | June 30, 2023 | June 30, 2022 | |||||||||||||||||
| REVENUES | $ | 21,787,389 | $ | 18,076,897 | $ | 42,657,152 | $ | 34,257,950 | ||||||||||||
| COST OF REVENUES | 18,861,088 | 16,935,840 | 37,101,448 | 31,660,945 | ||||||||||||||||
| GROSS PROFIT | 2,926,301 | 1,141,057 | 5,555,704 | 2,597,005 | ||||||||||||||||
| OPERATING EXPENSES: | ||||||||||||||||||||
| Selling, general and administrative | 2,723,387 | 2,287,965 | 5,785,988 | 4,751,846 | ||||||||||||||||
| Total operating expenses | 2,723,387 | 2,287,965 | 5,785,988 | 4,751,846 | ||||||||||||||||
| INCOME (LOSS) FROM OPERATIONS | 202,914 | (1,146,908 | ) | (230,284 | ) | (2,154,841 | ) | |||||||||||||
| OTHER INCOME (EXPENSE) | ||||||||||||||||||||
| Interest expense, net | (1,972,369 | ) | (2,178,694 | ) | (4,869,536 | ) | (4,797,731 | ) | ||||||||||||
